Americans Have More Freedom Today

One of the Koch brothers stepped from the shadows recently to offer a detailed glimpse into his worldview in an op-ed in The Wall Street Journal. The piece is revealing at a number of levels, but most interesting to me is the stunted and historically inaccurate way in which Charles Koch thinks about his own core value, which is freedom.

Koch writes that, “A truly free society is based on a vision of respect for people and what they value,” and he argues that big government and “collectivists,” along with the Obama administration have a different view, which is that “you are incapable of running your own life, but those in power are capable of running it for you.”

Koch quotes Thomas Jefferson as saying that, “The natural progress of things is for liberty to yield and government to gain ground.” Which is exactly what’s been happening in America over recent decades, he says.

We’ve made toward greater liberty even as government as grown by leaps and bounds—and, in many cases, because government has grown.

Of course, though, that’s not actually true: By nearly any measure, Americans have demonstrably more freedom now than they did 60 years ago before the rise of big government. And instead of rebutting Koch and people like him at the theoretical level, it’s more useful to just go over the progress we’ve made toward greater liberty even as government has grown by leaps and bounds—and, in many cases, because government has grown.

That progress is crystal clear when it comes to individual rights. In Koch’s lifetime, we’ve moved dramatically away from an America where large swaths of the population—women, minorities, gay people, the disabled—were denied basic personal liberties. Government has been a key agent of that change. More broadly, though, the new individualism that arose in the 1960s brought about a level of personal liberty for Americans to live as they please that didn’t exist the year that Koch was born.

But even if we just focus on economic freedom, which is what Koch cares about most, it’s hard to dispute that Americans have become much more free. Let’s take one simple form of economic freedom: the ability to start your own business. It’s much easier to do this today than, say, in the 1940s.

A long time ago, I wrote a book about the Harvard Business School class of 1949. A notable takeaway from that project was just how rare it was for ambitious people to become entrepreneurs in that era. It wasn’t even on the radar screen for HBS grads, nearly all of whom went to work for large companies. The reason was that most businesses of that time involved making things, which was very capital intensive, and also that capital was hard to come by, because the modern venture capital sector had not yet emerged. So it was hard to start your own thing.

Compare that to today: Entrepreneurship is red hot in business schools and it’s easier to start a business that at any time in American history. That’s true for several reasons:

First, many valuable goods and services can be produced without a lot of capital in the Information Age. Just look at Instagram or WhatsApp or AirBnB.

Second, it is much cheaper to market goods and services thanks to the internet. That shift has reduced a key barrier to growing a business. No longer do you have to pay for expensive broadcast and print advertising to have a fighting chance.

Third, even as costs have fallen, capital has become more available than ever before for entrepreneurs, and just recently the advent of crowdsourced funding has made startup cash even easier to come by. The Small Business Administration is another key source, thanks to government.

Fourth, there are many other resources that didn’t used to exist to help small business owners, including financial management software, business consultants, online outsourcing sites like Elance, tax credits, and incubator spaces.

Fifth, and related, the invention of franchising has made it much easier for people to get into business, because everything is prepackaged: the product, the branding, the employee training courses, the software systems. Franchising is a big, easy entry point for today’s small business people that didn’t exist in the 1940s.

And sixth: the expansion of the social safety net has made it more rational to take risks compared to when the class of 1949 graduated. Thanks to Medicare and Social Security, there’s only so far you can fall late in life if you’re a failure in business. And thanks to Obamacare, you can now leave a secure job to start a business without having to worry so much about losing your health insurance.

When Charles Koch and others on the right talk about the fall of personal freedom, I always wonder how they can ignore the dramatic gains made since World War II by social movements.

And when they talk about the decline of economic freedom, I wonder: Where do these people live? Because in city after city—more cities than every before—you can find a thriving startup culture where people are charting their own destinies through the power of the market.

And, no, it’s not just techies. The new entrepreneurship extends to many other sectors, too—including farming, of all things. Clearly, Charles Koch needs to get out of Wichita more often.

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